“Improved Nepal-India bilateral relationship can help Nepal to actively reengage in the world affairs.”

Despite the historic social, economic and political ties between Nepal and India, the bilateral relations between the two countries have hit some major roadblocks over the years. The 1950 Nepal-IndiaTreaty of Peace and Friendship has been considered as one of the major ones.

To review the 1950 treaty and all other bilateral pacts signed between the two countries, Nepal and India in January 2016 formed the Eminent Persons Group (EPG), a group of distinguished personalities representing both nations. The tenure of the group concluded on July 4. The ninth meeting of the group held on June 30 has drafted a joint reportwhich will be handed over to the prime ministers of both countries, after whichthe governments will engage to update or replace the 1950 treaty by reflecting the current realities and further strengthening the ties in a forward looking manner.

Dr Bhekh Bahadur Thapa, the convener of the Nepali side of the EPG has spent long professional life in the field of foreign policy, diplomacy and ministerial level responsibilities. Dr Thapa is considered to be someone who truly understands the depths of the Nepal-India relationship. He has served in the capacities of foreign minister, Nepal’s ambassador to India and the United States, governor of Nepal Rastra Bank, finance secretary, member secretary of the National Planning Commission, among others. In an interview with Ajay Bhadra Khanal and Sanjeev Sharma of New Business Age, Dr Thapa talked about the changing paradigm of Nepal’s relationship with its neighbours, problems and prospects in the country’s foreign policy approach and the work of EPG. Excerpts:

How successful do you think the Nepal-India Eminent Persons Group (EPG) has been in fulfilling its mandate?
The Nepali intelligentsia started raising their concerns over the provisions of the 1950 Nepal-India Treaty of Peace and Friendship immediately after it was signed. Despite some dialogue between the two neighbours, nobody over the course of many decades had thought of revising or replacing the treaty. When the treaty was inked, Nepal was not even a member of the United Nations (UN) and the democratic political process hadn't started in the country. People began to discuss the unequal provisions in the treaty after the Rana regime ended and Nepal became a member of the UN. Particularly, after the first general elections in 1959, such discussions gathered momentum. Gradually, Nepal began to express its disquiet over the bilateral treaty in front of India. The southern neighbour responded by saying it doesn't have any problem with the treaty and if Nepal has issues, the country should come up with alternatives. At that time, Nepal couldn’t take any concrete decisions in response. This continued for almost three to four decades.

Then in 1995, during the then Prime Minister Manamohan Adhikari’s state visit to India, the two sides for the first time agreed to review the treaty. The years following Adhikari's visit saw several high-level meetings take place between the countries to resolve the issue. This was also discussed at parliament. The revision of the 1950 Nepal-India Peace and Friendship Treaty became a hot topic for the intellectuals too. But both sides couldn't findany common ground for concrete decisions to move ahead. When Dr Baburam Bhattarai became the Prime Minister in 2011, he concentrated his efforts on making India agree on establishing a joint mechanism comprising of eminent individuals of Nepal and India so as to give momentum to the review of the treaty. Dr Bhattarai's endeavour was important as it was aimed at finding pragmatic solutions to the long-existing issues in Nepal-India bilateral relations.

During the premiership of late Sushil Koirala in 2014-15, internal preparations for the formation of the EPG gained momentum. The establishment of EPG finalised when KP Sharma Oli assumed the post of prime minister. In this way, the governments led by all the major political parties in Nepal have shown their willingness to move ahead and establish a joint body to formally recommend the governments of Nepal and India to resolve the long-standing issue in the bilateral relationship between the two neighbours.

The EPG was mandated to look into five broad areas of Nepal-India bilateral relations, namely politics, government-to-government ties, development cooperation, economic and cultural relations. The terms of reference of EPG incorporated an open agenda with a focus on the 1950 treaty.

The EPG has agreed not to present Nepali and Indian teams as two different sides but as a "single side" in order to find ways of improving and strengthening the historic relationship between the two closest neighbours of South Asia. Similarly, our attention has been on correcting the past discord and mistrust. Our focus has been on making the Nepal-India bilateral relations timely so that the present day reality is reflected in the ties between the two nations. We have agreed not to publicise the conclusions of the EPG meetings before submitting the joint report to the prime ministers of both countries. Nepal and India are not only two close neighbours. Their multifaceted relationship is quite complex and very broad at the same time. The focus of EPG has been on redefining the Nepal-India bilateral relations in the context of present day realities keeping in mind the UN Resolution of equality among the countries along with Nepal’s sovereign existence on the world stage. The time has not come yet to say how far we will go on achieving this motto. Eventually, the basis of the agreements of the EPG meetings will be made public. The joint report which will be presented before the prime minister of both countries will be the property of both governments. We have discussed in-depth about updating the 1950 treaty to give Nepal-India relations a new dimension.

What were the defining moments in finding ways to redefine the Nepal-India bilateral relations?
When Indian Prime Minister Narendra Modi addressed our parliament during his official visit in 2014, it signaled two major changes in the thinking of the Indian political establishment about Nepal. First, India has gradually accepted that not all concerns and complaints raised by Nepal over issues in the bilateral relationship are pointless. Second, Modi made an impression that India won’t interfere in Nepal’s internal matters. After Modi’s visit, intellectual pressure in terms of improving relationships with Nepal began to surface in the Indian media. Voices have been raised that India needs to take the initiative to improve and strengthen ties with its neighbours. Therefore, the last 3-4 years have been a defining moment leading towards a change in Nepal-India bilateral relations. Similarly, the role played by the present day prime ministers of both countries in starting the process of reviewing the 1950 treaty is also a stepping stone in this regard.

What shifts have you observed in Nepal’s foreign policy over the last 3-4 years?
There are 2-3 issues in this context. First, the importance of Nepal’s foreign policy lies in the country taking its own initiative to build the basis for its existence and progress. Second, is related to Nepal’s engagement in the global stage. At present, several global concerns such as climate change, human rights and trade and commerce issues have gained prominence. The post-cold war world has witnessed diverse practices in economic, political and social matters. Here, Nepal’s foreign policy approach should be not only towards securing its own interests but also to find ways to play a positive role in resolving the global issues.Having worked in the area of Nepal’s foreign policy in pre and post -90 periods, I have observed that our inability to actively engage in international events and issues for a long time is due to the internal conflicts. However, Nepal’s participation in the global events was not always like this. From Bandung Conference and Non-Aligned Movement to UN General Assembly, we had actively participated in the world affairs even when Nepal’s political system was not liberal. Later, the country was left behind in global affairs. For instance, Nepal couldn’t win the seat on the UN Security Council despite several attempts. Looking at the precarious condition, I’ve once said, “Nepal has no foreign policy. Its foreign policy is only what foreigners do in Nepal.”

Mature practice, in-depth study of issues and identification of national interests are the three major constituents of foreign policy. In Nepal’s context, there has been a mismatch between the components in terms of our foreign policy approach. Also, internal political wrangling has been one of the reasons to side with either neighbour. By and large, foreign policy should be guided by a totally non-partisan approach and larger national interests. However, the internal conflict and divisive mentality have hindered us to follow this principle.

Following last year’s three-tier elections, the process of establishing a decentralised development and people-centric government system has just started in Nepal. Now the time has come for us to avoid past mistakes in our foreign policy initiations. This is, nonetheless, a huge challenge for the new government, bureaucracy as well as the intellectuals to overcome. Improving Nepal-India bilateral relations can help Nepal to actively reengage in world affairs.

What kinds of emerging shifts do you see in Nepal's relations with China in relation to India?
While working as the finance secretary, I was on the negotiation committee to sign agreements with the Chinese government officials for the construction of the Sunkoshi Hydropower Project, Kathmandu-Kodari and Kathmandu-Pokhara highways.I found the Chinese to be very systematic, firm in their words and highly calculated. For long, China has been stressing on good Nepal-India relations.I have heard people say that Chairman Mao Zedong used to tell Nepali political delegationsvisiting China that his country well understands the importance of goodNepal-India bilateral relations and they wouldn’t take it as Nepal being anti-China. He used to stress that such a relationship between the two South Asian neighboursshould not harm China’s interests, nonetheless. This thinking of China as a nation has been very persistent.

Over the years, China has become an economic miracle. Now the country is looking towards expanding its influence across the globe. In this context, the Belt and Road Initiative highlights the country’s rising ambitions. The railway and road connectivity of China which is approaching nearer to our border will present a big economic opportunity for Nepal. As a next door neighbour, we should be able to capitalize on the potential of China’s initiative while also ensuring our other neighbour doesn’t take this as either competition or its replacement here. It will not be in Nepal’s interests to be either labeled as pro-China or pro-India with the changes in the government.

What will be the best way for Nepal to capitalise on the vast economic opportunities presented by both neighbours?
It won’t be wise for us to search for space in the competition between India and China. Both countries are competitors as well as collaborators at the same time. In spite of the border related disputes, they have joined hands for trade and commerce. Emergence of both neighbours as economic powerhouses of the world is advantageous for a country like Nepal. We can harness the potential by creating a place for itself in the markets of the two giants rather than being their market. Whether it is agriculture, manufacturing or information technology, Nepal can have a huge market access if the government can come up with a proper strategy for production and exports.

It is natural for a landlocked country like Nepal to push for connectivity with other nations. But infrastructure-based connectively is very costly and physically very hard to accomplish. However, both countries are working towards developing cross-border railway and road connectivity with Nepal. For us, it is a wait and watch situation as both countries are working without giving the impression that they are trying to promote their self-interests at the cost of conflict.

It is good that the initiations of both neighbours have given an extra opening for Nepal in terms of economic opportunities. Nevertheless, with the increasing use of social media,there is a tendency among many Nepalis to blindly jump for and against the initiations of our neighbours without properly evaluating the possible advantages and disadvantages. Now the intellectual community here has a challenge to keep such discussions within the boundary of our national interests.

Do you see any possibility of India and China coming together to help Nepal in its development?
The “two plus one” concept emerged in the context of Afghanistan. During last April’s meeting between Indian Prime Minister Modi and the Chinese President Xi, both leaders agreed for a joint development project in Afghanistan. The two leaders decided that Afghanistan also needs to be included in the dialogue between the two countries. The “two plus one” concept has also been raised as an intellectual discourse in the context of Nepal too. The proponents of this idea say that China and India need to come together to support Nepal. However, this concept about Nepal is still in a nascent stage and it is yet to create an echo.

What factors play a role in hindering the regional integration in South Asia?
Forums like Association of Southeast Asian Nations (ASEAN) and the European Union (EU) have performed miraculously for the economic transformation of the countries in the regions. Similarly, the regional forums in the Middle East and Africa have also demonstrated considerable progress. I am seeing a paralysis in South Asia in this regard. It took a significant amount of time for the formation of SAARC. Even after the formation, SAARC has registered little or no achievement at all. Due to this, South Asia has remained as the least integrated region in the world. Newerregional forums like Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and Bangladesh, Bhutan, India, Nepal (BBIN) Initiative came out make SAARC dormant. In a situation where the border sharing South Asian countries haven’t been able to overcome their differences, how can the forums like BIMSTEC which include faraway countries make a difference in regional cooperation and development?

In recent years, India and other South/East Asian nations have given more importance to forums like BIMSTEC and BBIN. Could these sub-regional architectures be an alternative to SAARC?
Sub-regional architectures have been successful only in some isolated cases around the world. It is not that regional architectures like SAARC have lost their importance and relevancy. But, there are many problems that need to be resolved to ensure its success. There is a need to push for free movement of people and connectively between the countries for the benefit and prosperity in the region. In the past, SAARC countries had agreed to abolish visas in order to facilitate free movement of people across the region. But,the hostility between India and Pakistan held back such an important arrangement. Signing agreements in regional conferences and not translating them into practice have pushed the South Asia region backwards. As a result, people have lost their trust over the regional agreements. Also, SAARC had also agreed to connect all the countries by air. Nepal was the only country in South Asia to fly to all countries in the region. But despite having hundreds of planes, countries like India and Pakistanhave hesitated to fly to all the countries in the region.

There are many other examples of irresponsibility. Agreement for the South Asian Free Trade Area (SAFTA), for instance, was reached on 2004, 11 years after the SAARC Preferential Trading Arrangement (SAPTA) was signed. But after so many years, nothing has changed on the ground in terms of doing trade and business across the South Asia region. Problems in trade have remained the same. For example, while exporting vegetables from Nepal to India, the items are required to pass the quarantine test in Patna.

The recent years have seen increasing calls for economic diplomacy to attract FDI in Nepal. How can the government engage effectively in economic diplomacy?
We have been talking about economic diplomacy for decades now. What we’ve done till date is open up offices of consulate generals in a number of countries. However, the most important foundation for economic diplomacy is creating trade treaties between countries. Nepal and India signed the 1996 Trade Treaty. As per the treaty, all Nepali products are eligible to be openly exportedto India. But when new industries started to open in the Terai region, the politicians of bordering Uttar Pradesh and Bihar states of India pressurised the central government to rescind the agreement. Even quantitative restrictions were placed on Nepali exports in a clear breach of the treaty’s provision. Our efforts to stop such violations of the treaty were ineffective which indicates Nepal’s weaknesses in economic diplomacy. Diplomacy is not only about establishing embassies or consulates.We need to be clear about our work to achieve the objectives.

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